GONGOL, Tomáš. The Preliminary Ruling Decision in the Case of Google vs. Louis Vuitton Concerning the AdWord Service and its Impact on the Community Law. The Amfiteatru Economic Journal. 2013, vol. 15, č. 33, s. 246-260. ISSN 1582 - 9146.
The Preliminary Ruling Decision in the Case of Google vs. Louis Vuitton Concerning the AdWord Service and its Impact on the Community Law
Tomáš Gongol1
1)Silesian University in Opava, School of Business Administration in
Karvina, Czech Republic
E-mail:
gongol@opf.slu.cz
Abstract
The internet user after entering the
keywords obtains two kinds of search results – natural and sponsored ones. The
following paper deals with the issue of using keywords which correspond to
trademarks registered by a third party for advertising purposes through
internet search portals such as Google, Yahoo, Bing, Seznam, Centrum etc. (in
principle web search portals). The objective of this article is to
analyze decided cases dealing with the AdWords service issued by the Court of
Justice of the European Union and compare them also with the attitude in
similar disputes in the U.S. Within this knowledge it is necessary to determine
the impact of these decisions on further national courts decisions of European
Union member states. Moreover there is also legal impact on copyright law and
responsibility of internet search engines deduced. The method of the analysis
of courts decisions is used and the method of legal comparison is applied to
different attitudes in similar cases. Where
a third party uses a sign which is identical with the trademark in relation to
goods or services identical with those for which the mark is registered, the
trademark proprietor is allowed to prohibit such use if it is liable to affect
one of the functions of the mark (particularly the function of indicating
origin). Regarding to the liability of the Internet search engine
itself, decisions of the courts in matters of Internet search engines in the
European Union vary from state to state. Whereas the German courts tend to
currently access the responsibility for the outcome of the search engines more
freely, the French courts are often more stringent. Differently, we can say
much more liberal, is the access of the U.S. courts to this issue. Preliminary
ruling decision in case of Louis Vuitton Malletier SA vs. Google, Inc. and
community practice in further cases follow similar (liberal) decisions of the
courts of the U.S.
.
Keywords: keyword
advertising, Google Adwords, Louis Vuitton, preliminary ruling decision,
protection of consumer, search portal, trademark protection
JEL Classification: K29
Introduction
Every user of the
Internet uses some of the search engines. None of us knows the web addresses
for gaining information that we need. Thus, there is an opportunity for
services that do the required search and offer us the results. This kind of
service providers are, e.g. google.com, yahoo.com or national search engines
(the most important in the Czech Republic is seznam.cz). The world most
widespread one is the search engine of Google, Inc. Due to the specificity of
the environment of the Internet and to the gaps in law (Černý and Telec, 2005)
the company listed above was party to many disputes in European countries and
in the USA. The results of several litigations were taken into account while
writing this paper. Points of law related to search engines concern especially
points related to Trademark Law, Unfair Competition Law, Copyright law and
others. The relationship between
trademark law and the internet has already been objective in several studies.
Marshall (1998) explains how the process of globalization influences trademark
law. It is out of any doubt that trademarks play an important role in the
global market place. The question is, whether legal protection is sufficient
and further cases demonstrate legal gaps in this field. Goldman (2005) points
out other problems of searching engines using the content identical to
registered trademarks when trademark protection is excessive so that
“jeopardize the Internet’s potential as an information resource”. It is an
important task to find suitable protection of intangible assets on the Internet.
Keyword advertisement in several decisions of the Court of Justice of the
European Union has already been in some aspects described by Gielen (2010), who
points out problems of a vague definition of legal terminology. Theoretical base
with the stress on market transparency and the main purpose of trademarks was
defined by Seftleben (2011).
The Internet user
after entering the keywords obtains two kinds of search results – natural and
sponsored ones. There can be a problem, when an advertiser chooses keywords
equivalent to the protected intangible assets (typically trademarks) and brings
users through the sponsored link to his own websites offering competitive
products or services, or imitations. The main research question focuses on
responsibility of subjects involved in registering keywords identical (similar)
to registered trademarks. The method of the
analysis of courts decisions has been used to get legal background of this
problem.
National courts
have already solved tens of these problems, e.g. decisions in „presipiraten“ or
„bananabay“ trademarks cases in Germany, decision in the case „rentabiliweb“ or
„citadines“ in France. For example, from
Google’s liability point of view, German and French courts solved the similar
factual basis often in a different way. The method of legal comparison will be
applied to different attitudes in similar cases in several states in the European
Union. Moreover, comparison with U.S. courts decisions will be made.
In the end, the
issue of the AdWords service was decided at the European Union level in a few
cases. It concerns decisions of the Court of Justice of the European Union (the
Court below), especially decision in Google vs. Louis Vuitton and others (from
23. 3. 2010), BergSpechte vs. trekking.at Reisen (from 25. 3. 2010), Portakabin
vs. Primakabin (from 8. 7. 2010), L’Oréal vs. eBay (from 12.7.2011), Interflora
vs. Marks & Spencer (22.10.2011). The issue of venue jurisdiction is solved
in decision in Wintersteiger vs. Products 4U Sondermaschinenbau, but we leave
it aside.
The problem of
keyword advertising is not only the legal issue but has an economic impact and technical
and marketing aspects as well. From the economic point of view the problem of
information is described by “the economics of information” originally used by
Stiegler in 1961. We can also mention for our problem Griffiths’ (2008) idea of
reducing consumers’ costs for searching by identifying commercial origin of
goods. In addition, we can mention also technical aspects of search portals and
e-commerce in general as it is described by Vymětal and Suchánek (2011).
Marketing attributes of consumers’ protection and risks in connection with
e-commerce is defined in Pelau and Bena (2010).
The structure of
the paper is influenced by the timetable of decision making by the Court of
Justice of the European Union. It is necessary to start the first chapter with the
basic decision in case Google vs. Louis Vuitton which has created legal
background for further cases. Other cases influenced by previous one are described
in Chapter two. On the basis of this analysis it is possible in Chapter three
to determine implications of these decisions on the national court decision in
several cases. Chapter four applies results of the case of Google vs. Louis
Vuitton also on the copyright law. Chapter five extends the comparison of European
courts practices also to decisions of U.S. courts. The conclusion summarizes
implications of the paper and predicts further development.
1. The decision of the Court of Justice in Google vs.
Louis Vuitton and other subjects
There will appear
results after inserting a keyword or several keywords into the search engine.
These are especially so-called natural results of the search and they are
displayed in descending order according to the pre-defined criteria of
relevance. According to these results, when using the google.com search engine,
a paid referencing service called ‘AdWords’
(Advertising Words) can be used. The essence of this subject is in the ability
to influence the search results and display them in different (special) column
(bar) called „sponsored links“. This service enables to display the links to the
advertiser’s websites on a special place as a response to inserting the
keywords into the search engine. The AdWords service is automated and it allows
advertisers to select their own keywords as well as influencing the order. A
number of advertisers can reserve the same keyword. The order in which their
advertising links are then displayed is determined according to, in particular,
the maximum price per click, the number of previous clicks on those links and
the quality of the ad as assessed by Google Inc.
The first of
decisions was issued on 23 March 2010 and it was a preliminary ruling decision
in joined cases C-236/08 to C-238/08. The mentioned cases covered the dispute
between Google Inc. (Google France SARL) and Louis Vuitton Malletier SA,
Viatikum SA, Luteciel SARL and other subjects. Considering the importance of
this decision for the Member States of the European Union and for further
interpretation and conclusions of this paper, the mentioned decision will be
closer explained in the following sentences.
In this dispute the
company Vuitton, known for its luxury leather goods, owns the national
trademark „Louis Vuitton“ and „LV“ as well as the Community trademark
„Vuitton“. When you enter these terms
constituting its trademarks into the Google’s search engine triggered the
display, under the heading ‘sponsored links’, of links to sites offering
imitation versions of Vuitton’s products. Of course, Vuitton Company
defended against such action and brought
proceeding against Google with a view, inter alia, to obtaining a declaration
that Google had infringed its trademarks through offering these
sponsored links. Google was found guilty of
infringing Vuitton’s trademarks by a judgment of the Tribunal de grande
instance de Paris (Regional Court, Paris), and subsequently, on appeal, by
judgment of the Cour d’appel de Paris (Court of Appeal, Paris). Google has
brought an appeal on a point of law (cassation) against that latter judgment.
In those circumstances, the Cour de
cassation (French Court of Cassation) decided to stay the proceedings and to
refer the following questions to the Court for a preliminary ruling:
„1) Must Article 5(1)(a) and (b) of [Directive 89/104] and
Article 9(1)(a) and (b) of [Regulation No 40/94] be interpreted as meaning that
a provider of a paid referencing service who makes available to advertisers
keywords reproducing or imitating registered trademarks and arranges by the
referencing agreement to create and favourably display, on the basis of those
keywords, advertising links to sites offering infringing goods is using those
trademarks in a manner which their proprietor is entitled to prevent?
2) In the event that the trademarks have a
reputation, may the proprietor oppose such use under Article 5(2) of [Directive
89/104] and Article 9(1)(c) of [Regulation No 40/94]?
3) In the event that such use does not constitute a use
which may be prevented by the trademark proprietor under [Directive 89/104] or
[Regulation No 40/94], may the provider of the paid referencing service be
regarded as providing an information society service consisting of the storage
of information provided by the recipient of the service, within the meaning of
Article 14 of [Directive 2000/31], so that that provider cannot incur liability
until it has been notified by the trademark proprietor of the unlawful use of
the sign by the advertiser?“
From our point of
view there can be two key questions dealing with the liability of the internet
search engines:
1)
Is using the trademark by the provider of the paid
referencing service within the meaning of the mentioned Directive, not to say
national acts (e.g. in the case of the Czech legal system in the use in
commerce within the meaning of § 8, § 3 of Marks Act 2003. s.8 and s.3.) that
implemented it?
2)
May the provider of the paid
referencing service be regarded as providing an information society service within the
mentioned EC Directive No 31/2000,
not to say national acts that implemented it (in the case of the Czech law it
is Certain Society Services Act 2004)?
The Court of
Justice drew the conclusion, in the case of the first question, that the internet referencing service provider which
stores, as a keyword, a sign identical to those for which trademark is
registered does not use that sign within the meaning of mentioned Directives.
The Court argued, referring to Article 9 (1) EC Regulation No 40/94, that the proprietor shall be entitled to prevent all third
parties not having his consent from using in the course of trade any sign which
is identical (or similar) with the trademark. This is true under the condition
that trademark is in relation to goods or services which are identical with
those for which the trademark is registered, and affects, or is liable to
affect, the functions of the trademark (Gielen, 2010). According to
Gielen (2010) the use of a sign identical with a
trademark constitutes use in the course of trade where it occurs in the context
of commercial activity with a view to economic advantage and not as a private
matter (for further details see the Court of Justice case no C‑206/01 on
Arsenal Football Club, s. I‑10273, point 40). The Court argued that to the referencing service provider, it is common
ground that it is carrying out a commercial activity “with a view to economic
advantage when it stores as keywords of its clients, signs which are identical
with trademarks and arranges for the display of ads based on those keywords”
(Gielen, 2010). However, for
fulfilling the meaning of the Directive, the
use, by a third party, of a sign which is identical with (or similar to), the
proprietor’s trademark implies, at the very least, that that third party uses
the sign in its own commercial communication. The referencing service provider
allows his clients using identical (or similar) sights, which is not use of the
sign itself. According to the Court (decision in Case C-237/08, point 57) “that
conclusion is not called into question by the fact that that service provider
is paid by its clients (advertisers) for the use of those signs. The fact of
creating the technical conditions necessary for the use of a sign and being
paid for that service does not mean that the party offering the service itself
uses the sign. To the extent to which it has permitted its client to
make such a use of the sign, its role must, as necessary, be examined from the
angle of rules of law other than
the mentioned EC Directive No 31/2000 (hereto see below).”
On
the contrary, the Court found that the choice of the keyword, which is
identical with trademark, made by the advertiser is using that sign within the
meaning stated above. Gielen (2010) claims that since the sign selected as a
keyword is the means used to trigger that ad display, it cannot be disputed
that the advertiser indeed uses it in the context of commercial activity and
not as a private matter. The fact that
the sign used by the third party for advertising purposes does not appear in
the ad cannot mean by itself that the use falls outside the concept of using signs selected as a keyword in relation to goods or services.
The using itself is not the only prerequisite that must be fulfilled to
enable trademark proprietors to prohibit a using of the trademark by third
parties. Article 5(1)(a) of ES Directive No 89/104 enables
proprietors of the trademark to prohibit a third party from using sign selected
as a keyword identical with those products or services for which that trademark
is registered. Therefore the Court claims (Case C-236/8) that “the exercise of
that right must therefore be reserved to cases in which a third party’s use of
the sign affects or is liable to affect the functions of the trademark.”
The Court then continues “those functions include not only the essential
function of the trademark, which is to guarantee to consumers the origin of the
goods or services (‘the function of
indicating origin’), but also its other functions, in particular that of
guaranteeing the quality of the goods or services in question and those of
communication, investment or advertising”.
Relevant functions to be examined are the function of indicating origin
and advertising. Regarding the advertising function, the Court found that use
of a sign identical with another person’s trademark in the referencing service
such as „AdWords“ service, is not liable according to Gielen (2010) to have an
adverse effect on the advertising function of the trademark. It
follows from those factors that, when internet users enter the name of a
trademark as a search term, the home and advertising page of the proprietor of
that mark will appear in the list of the natural results, usually in one of the
highest positions on that list. That display is independent on what appears
under the heading „sponsored links“ and therefore, it is not liable to affect
the advertising function of the trademark.
According to Boháček and Menčl (2012) this conclusion of the Court is doubtful
because the prerequisite to appearing in one of the highest positions in the
list of natural results must be actually fulfilled.
Regarding the function of indicating origin, the question
whether the advertising function is negatively affected when are shown to
internet users, when using the keyword identical with a mark, a third party’s
ad. According to Gielen (2010) the function of indicating the origin of the
mark is adversely affected if the ad does not enable normally informed and
reasonably attentive internet users (average internet users), or enables them
only with difficulty, to ascertain whether the goods or services referred to by
the ad originate from the proprietor of the trademark or an undertaking
economically connected to it or, on the contrary, originate from a third party.
Court (in Case C-238/08 claims that “if the use by the third party of the sign
identical with the mark as a keyword triggering the display of that ad is
liable to create the impression that there is a material link in the course of
trade between the goods or services in question and the proprietor of the
trademark”, it is adversely affecting the function of indicating origin.
It is necessary to summarize that a proprietor of the trademark is
entitled to prohibit an advertiser to advertise his products or services which
are identical to registered trademark, through a sign selected as a keyword
identical with the trademark. All
this on condition that ad does not enable an average internet user, or enables
him only with difficulties to distinguish whether the goods which are referred
to by the advertisements originate from a proprietor of the trademark or
undertaking economically connected to it or originate from a third party. Such
a consideration will depend on the particular national court, but it may again
cause the different approaches to this case.
The
Court found that the EC Directive No 31/2000
must be interpreted as meaning that the rule laid down therein applies to an
internet referencing service provider in the case where that service provider
has not played an active role of such a kind as to give it knowledge of, or
control over, the data stored. If it has not played such a role, that service
provider cannot be held liable for the data which it has stored at the request
of an advertiser, unless, having obtained knowledge of the unlawful nature of
those data or of that advertiser’s activities, it failed to disable access to
the data. The conclusions noted above are based on
Section 4 of EC Directive No 31/2000 entitled „Liability of intermediary
service providers“.
In connection with the decision, it can be stated that the Google AdWords
service is an information society service and that the restrictions of
liability in Article 14 of the Directive can be applied to it. Gielen (2010)
claims that the concept of information society covers services which are
provided at a distance, by means of electronic equipment for the processing and
storage of data, at the individual request of a recipient of services, and
normally in return for remuneration. With regard to the characteristics of the
search engine, the Court came to the conclusion that the Google AdWords service
includes all the features of the definition. A referencing
service provider transmits information from the recipient of that service,
namely the advertiser, over a communications network accessible to internet
users and stores, that is to say, holds in memory on its server, certain data,
such as the keywords selected by the advertiser, the advertising link and the
accompanying commercial message, as well as the address of the advertiser’s
site.
In
order for the storage by a referencing service provider to come within the
scope of Article 14 of EC Directive No. 31/2000, it is further necessary that
the conduct of that service provider should be limited to that of an ‘intermediary
service provider’ within the meaning intended by the legislature in the context
of Section 4 of that directive. In that regard, it
follows from recital 42 in the preamble to EC Directive No 31/2000 that “the
exemptions from liability established in that directive cover only cases in
which the activity of the information society service provider is of a mere
technical, automatic and passive nature, which implies that that service
provider has neither knowledge of nor control over the information which is
transmitted or stored”. With the help of
software which it has developed, Google processes the data entered by
advertisers and the resulting display of the ads is made under conditions which
Google controls. Thus, Google determines the order of display according to,
inter alia, the remuneration paid by the advertisers. It was pointed out by
Gielen (2010) that the mere facts that the referencing service is subject to
payment, that Google sets the payment terms or that it provides general
information to its clients cannot have the effect of depriving Google of the
exemptions from liability provided for in EC Directive No 31/2000 (notwithstanding
see, e.g. the Court of First Instance in MySpace or Dailymotion in France,
where the court ruled a violation of copyright and responsibility for
publishing content of their users). Otherwise, it would be necessary to
punish also internet service providers or webhosting services providers because
their services are also paid and indirectly allow e.g. wide spreading of the
copyrights they did not create by themselves.
The Article 15 in the Directive, entitled „No general obligation to
monitor“, can also be applied to providers of this service: „Member States shall not impose a general obligation on
providers, when providing the services covered by Articles 12, 13 and 14, to
monitor the information which they transmit or store, nor a general obligation
actively to seek facts or circumstances indicating illegal activity“.
Žádné komentáře:
Okomentovat